PSRC: Armenia “doomed” to electricity tariff hike

June 10, 2014 - 18:08 AMT

PanARMENIAN.Net - The head of Public Services Regulatory Commission (PSRC) announced an AMD 4 per kWh increase for electricity tariffs likely to enter force August 1.

“We’re doomed to initiate the hike. Were there the least possibility to avoid the measure, we would have taken it. Hard as the move is, we have to fulfill our functions of providing stable electricity supply,” Robert Nazaryan told a June 10 news conference.

“As of now, Electric Network of Armenia suffered an AMD 16 billion 600 million loss, and can go bankrupt in case the company gains no income,” the PSRC chief said, according to Tert.am.

However, according to ARKA, management expert Harutyun Mesropyan believes that Armenian electricity generating companies can reduce their expenditures by 10% without damaging their businesses.

The comment was made in reference to power plants’ and national distribution company’s plans to raise the price of electricity for households by more than 10 percent one year after an almost 27 percent hike, allowed by the regulator.

"I am confident that electricity tariffs can be easily reduced by 10% and that move will not damage energy supplying companies. This in turn will benefit all,” he said.

Mesropyan also expressed confidence that these companies can easily reduce by 30% their indirect expenses, including the expenses on the maintenance of an army of secretaries, drivers, company cars, and more.

"Take, for example, salaries and bonuses. They have increased over the past 15-20 years from 10% to 30%, and in some cases even doubled. This suggests that the companies’ costs increased and to compensate they want to get into our pockets by increasing electricity prices, "he said.